# Ranger Energy Services, Inc. (RNGR) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Ranger Energy Services, Inc.'s 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1699039/000169903925000015/rngr-20241231.htm
Accession: 0001699039-25-000015
Filing date: 2025-03-04
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/RNGR/
All MD&A years: /company/RNGR/mda/
Previous year: /company/RNGR/mda/fy2023/ (FY 2023)
Next year: /company/RNGR/mda/fy2025/ (FY 2025)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the historical financial statements and related notes included elsewhere in this Annual Report. This discussion contains “forward‑looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. These statements include certain risks and uncertainties. Please read “Cautionary Statement Regarding Forward‑Looking Statements” and the risk factors described under “Part I, Item 1A.-Risk Factors” for more details.

2024 Business Update

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Business Outlook

We are a provider of onshore high specification well service rigs and complementary services in the United States. We provide an extensive range of well site services to leading U.S. E&P companies that are fundamental to establishing, maintaining and enhancing the flow of oil and natural gas throughout the productive life of a well. Additionally, we serve to assist our customers in decommissioning wells at the end of their economic life. A comprehensive discussion of each of our reporting segments is included below in the section titled “How We Evaluate Our Operations.”

We operate in most of the active oil and natural gas basins in the United States, including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays.

As the Company looks ahead to 2025, we anticipate steady business opportunities as both the U.S. and global economies continue to demonstrate resilience. We further expect our financial results to show slight year-over-year improvement. According to the International Energy Agency, global oil demand is projected to increase by 1.1 million barrels per day in 2025, compared to demand growth of 1.2 million barrels per day in 2024. As we are a production-focused business with solely domestic operations, we have also considered the U.S. Energy Information Administration’s estimate that daily crude oil production in the United States is expected to increase to 13.5 million barrels per day, up from 13.2 million barrels per day in 2024. It is anticipated by the International Energy Agency that OPEC+ will begin increasing production in 2025, while demand is expected to remain relatively muted. With supply and demand remaining imbalanced, downward pressure on prices is forecasted by both the International Energy Agency and the U.S. Energy Information Administration, with oil prices expected to average approximately $74 per barrel during 2025 as compared to $81 per barrel in 2024. While we do not have significant gas market exposure, we expect some tailwinds in gas markets as being potentially beneficial to our business as the U.S. Energy Information Administration forecasts natural gas spot prices of $3.10 per million BTU and U.S. LNG exports of 14 billion cubic feet per day in 2025, compared to 2024 actual figures of $2.10 and 12 billion cubic feet, respectively.

Acquisitions and Integrations

During 2021, 2022, 2023 and 2024, the Company placed significant focus on acquiring and integrating assets and associated operations, described below, into current business processes. Through these acquisitions and their subsequent integrations, Ranger has continued to refine its business strategies and processes to focus on the performance of the Company and anticipates that acquisitions will continue to play a key role in the business going forward.

The largest of its recent acquisitions took place during the fall of 2021 when Ranger Energy Acquisition, LLC, entered into an Asset Purchase Agreement for certain assets of Basic and certain of its subsidiaries. As consideration for the assets acquired, the Company paid $36.7 million in cash, where such cash was generated through the issuance of Series A Preferred Stock. Purchased assets included well servicing rigs, fishing and rental assets, coiled tubing units, and rolling stock assets required to support the operating assets as well as certain real property. Separately, during 2021, the Company made two additional acquisitions of wireline service providers that operated throughout the Permian, Denver-Julesburg and Powder River Basins and the Bakken Shale. These acquisitions significantly expanded the scale and scope of the existing wireline business.

During 2023, the Company complemented the earlier acquisitions with the purchase of certain pumping assets and associated equipment to continue to bolster its wireline segment capabilities. While no deals were completed in 2024, we remained active in the pursuit of accretive opportunities and will continue to do so during 2025.

Internal Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the guidelines established in the Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024. For further information, please see “Part II, Item 9A. Controls and Procedures.”

How We Evaluate Our Operations

We provide services within the United States that are organized into three reporting segments: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services, which are described below. The reportable segments have been categorized based on the nature of services provided within each line of business.

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Our service offerings consist of well completion support, workover, well maintenance, wireline, other complementary services, as well as well installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:

•High Specification Rigs. Provides high specification well service rigs to facilitate operations throughout the life cycle of a well.

•Wireline Services. Provides services necessary to bring and maintain a well on production and consists of our completion, production and pump down service lines.

•Processing Solutions and Ancillary Services. Provides complimentary services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. The services primarily include equipment rentals, coil tubing, plug and abandonment, and processing solutions.

•Other. Other represents costs not allocable to the reporting segments and includes corporate general and administrative expenses and depreciation of corporate furniture and fixtures, amortization, impairments, debt retirements and other items similar in nature.

Financial Metrics

How We Generate Revenue

Rig hours and stage counts, as it relates to our High Specification Rigs and Wireline Services segments, respectively, are important indicators of our activity levels and profitability. Rig hours represent the aggregate number of hours that our well service rigs actively worked. Stage counts represent the number of completed stages during the periods presented for the completion service line within our Wireline Services segment. Generally, during the period our services are being provided, our customers are billed on an hourly basis for our high specification rig services or, as it relates to our wireline services, customers are billed upon the completion of the well, on a monthly basis, or on a per job basis. The rates for which the customer is billed is generally predetermined based upon a contractual agreement.

Costs of Conducting Our Business

The principal costs associated with conducting our business are personnel, repairs and maintenance, general and administrative, and depreciation expense.

Cost of Services. The primary costs associated with our cost of services are related to personnel expenses and repairs and maintenance of our fixed assets. A significant portion of these expenses are variable, and therefore typically managed based on industry conditions and demand for our services. Further, there is generally a correlation between our revenue generated and personnel and repairs and maintenance costs, which are dependent upon the operational activity.

Personnel costs associated with our operational employees represent the most significant cost of our business. A substantial portion of our labor costs is attributable to our field crews and is partly variable based on the requirements of specific customers.

General & Administrative. General and administrative expenses are corporate in nature and are included within Other. These costs include the majority of centrally-located company management and administrative personnel and are not attributable to any of our lines of businesses nor reporting segments.

Operating Income or Loss

We analyze our operating income or loss by segment, which we have defined as revenue less cost of services and depreciation expense. While we believe this is a key financial metric as it provides insight on profitability and operational performance based on the historical cost basis of our assets.

Adjusted EBITDA

We view Adjusted EBITDA, which is a non‑GAAP financial measure, as an important indicator of performance. The CODM primarily uses Adjusted EBITDA to assess segment profitability and make resource allocation decisions. We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, depreciation and amortization, equity‑based compensation, loss on debt retirement, gain or loss on disposal of property and equipment, acquisition‑related costs, severance and reorganization costs, significant and unusual legal fees and settlements, impairment of fixed assets, and certain other non‑cash and certain other items that we do not view as indicative of our ongoing performance. See “—Results of Operations” and “—Note Regarding Non‑GAAP Financial Measure” for more information and reconciliations of net

34

income (loss) to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

Results of Operations

The Year Ended December 31, 2024 compared to the Year Ended December 31, 2023

The following is an analysis of our operating results. See “—How We Evaluate Our Operations” for definitions of rig hours, stage counts and other analogous information, as well as key operating metrics (in millions).

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Revenue. Revenue decreased $65.5 million, or 10%, to $571.1 million for the year ended December 31, 2024 from $636.6 million for the year ended December 31, 2023. The change in revenue by segment was as follows:

High Specification Rigs. High Specification Rig revenue increased $22.8 million, or 7%, to $336.1 million for the year ended December 31, 2024 from $313.3 million for the year ended December 31, 2023. The increase in revenue included an increase in average revenue per rig hour by 5% to $736 from $703 for the year ended December 31, 2023, coupled by a corresponding 2% increase in total rig hours to 456,900 for the year ended December 31, 2024 from 446,000 for the year ended December 31, 2023.

Wireline Services. Wireline Services revenue decreased $88.9 million, or 45%, to $110.2 million for the year ended December 31, 2024 from $199.1 million for the year ended December 31, 2023. The decrease in wireline services revenue was attributable to reductions in the completions service line totaling $90.9 million illustrated by a 63% decrease in completed stage count to 9,400 from 25,600 in the prior year. This decrease in completion services and stage count corresponds with lower operational activity as the Company adjusted its service mix in response to market conditions. Wireline pump down experienced decreases year over year in revenue of $2.4 million that were driven by pricing reductions as a consequence of increased competition from frac providers. These declines were offset by wireline production service

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revenue, which increased year over year by $4.4 million reflecting increased operational activity and an intentional management decision to pivot to production related work.

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services revenue increased $0.6 million, to $124.8 million for the year ended December 31, 2024 from $124.2 million for the year ended December 31, 2023. The increase reflects higher activity in other Ancillary Services lines with revenue growth in our rentals, plugging and abandonment, and logistics service lines of $5.5 million, $1.1 million, and $1.1 million, respectively. Our Torrent gas processing business has continued to expand, generating $8.5 million in revenue for the year ended December 31, 2024, compared to $5.0 million for the year ended December 31, 2023, an increase of $3.5 million. These increases were partially offset by declines in our coil tubing and snubbing services, which decreased by $4.5 million and $2.3 million, respectively.

Cost of services (exclusive of depreciation and amortization). Cost of services (exclusive of depreciation and amortization) decreased $58.9 million, or 11%, to $472.8 million for the year ended December 31, 2024 from $531.7 million for the year ended December 31, 2023. As a percentage of revenue, cost of services was approximately 83% and 84% for the years ended December 31, 2024 and 2023, respectively. The change in cost of services by segment was as follows:

High Specification Rigs. High Specification Rig cost of services increased $17.9 million, or 7%, to $267.1 million for the year ended December 31, 2024 from $249.2 million for the year ended December 31, 2023. The increase was primarily attributable to an increase in variable expenses, notably employee-related labor, repair and maintenance, and travel costs of $11.4 million, $3.2 million and $2.6 million, respectively. As a percentage of High Specification Rigs Services revenue, cost of services improved from 80% for the year ended December 31, 2023 to 79% for the year ended December 31, 2024.

Wireline Services. Wireline Services cost of services decreased $73.4 million, or 41%, to $107.3 million for the year ended December 31, 2024 from $180.7 million for the year ended December 31, 2023. The decrease is primarily attributable to a decrease in costs from the completion services lines by approximately $82.4 million as the Company reorganized this service line in response to lower operation activity. As a percentage of Wireline Services revenue, cost of services increased from 91% for the year ended December 31, 2023 to 97% for the year ended December 31, 2024 primarily due to declining operating leverage due to lower activity levels. The decrease in completion service line costs was offset by an increase in costs from the production service line to drive expanding activity levels.

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services cost of services decreased $3.4 million, or 3%, to $98.4 million for the year ended December 31, 2024 from $101.8 million for the year ended December 31, 2023. The decrease is primarily attributable to decreased employee labor, repair and maintenance, travel, and fuel costs which amounted to $2.9 million, $1.6 million, $1.5 million and $0.9 million in cost reductions, respectively. As a percentage of Processing Solutions and Ancillary Services revenue, cost of services improved from 82% for the year ended December 31, 2023 to 79% for the year ended December 31, 2024 due to service line mix with increased activity in higher margin service lines offset by reductions in services lines that historically carried higher cost levels.

General and Administrative. General and administrative expenses decreased $1.7 million, or 6%, to $27.8 million for the year ended December 31, 2024 from $29.5 million for the year ended December 31, 2023. The decrease in general and administrative expenses is primarily due to lower personnel costs and professional fees relative to the year ended December 31, 2023.

Depreciation and Amortization. Depreciation and amortization increased $4.2 million, or 11%, to $44.1 million for the year ended December 31, 2024 from $39.9 million for the year ended December 31, 2023. The increase was largely attributable to capital expenditures during the year ended December 31, 2024.

Interest Expense, net. Net interest expense decreased $0.9 million, or 26%, to $2.6 million for the year ended December 31, 2024 from $3.5 million for the year ended December 31, 2023. The decrease in net interest expense was attributable to the decreased levels of borrowings year over year in conjunction with refinancings completed during the second quarter of 2023 resulting in lower borrowing costs.

Income Tax Expense. Income tax expense increased $0.4 million, or 6%, to $7.6 million for the year ended December 31, 2024 from $7.2 million for the year ended December 31, 2023. The increase in income tax expense resulted from a one-time discreet benefit recorded during the year ended December 31, 2023.

Net Income. Net income for the year ended December 31, 2024 decreased $5.4 million, or 23%, to $18.4 million from $23.8 million for the year ended December 31, 2023. The decrease in net income was primarily driven by reduced activity in Wireline Services segment.

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Note Regarding Non‑GAAP Financial Measure

Adjusted EBITDA is not a financial measure determined in accordance with U.S. GAAP. We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, depreciation and amortization, equity‑based compensation, loss on debt retirement, gain or loss on disposal of property and equipment, acquisition related costs, severance and reorganization costs, significant and unusual legal fees and settlements, impairment of fixed assets, and certain other non-cash and certain other items that we do not view as indicative of our ongoing performance.

We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with U.S. GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that our results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. 

The Year Ended December 31, 2024 compared to The Year Ended December 31, 2023

The following is an analysis of our Adjusted EBITDA. See “Part II, Item 8. Financial Statements and Supplementary Data—Note 16—Segment Reporting” and “—Results of Operations” for further details (in millions).

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[[/GREPCENT_TABLE]]

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[[/GREPCENT_TABLE]]

Adjusted EBITDA for the year ended December 31, 2024 decreased $5.5 million to $78.9 million from $84.4 million for the year ended December 31, 2023. The change by segment was as follows:

High Specification Rigs. High Specification Rigs Adjusted EBITDA increased $6.4 million to $70.5 million from $64.1 million primarily due to an increase in revenue of $22.8 million partially offset by an increase in cost of services of $17.9 million.

Wireline Services. Wireline Services Adjusted EBITDA decreased $16.6 million to $3.5 million from $20.1 million primarily due to significant decreases in operating activity within the completions service line and higher costs relative to revenues in production and pump down service lines.

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services Adjusted EBITDA increased $4.2 million to $26.6 million from $22.4 million due to an increase in revenue of $0.6 million coupled with a decrease in cost of services of $3.4 million, driven by increasing operational activity and increased contribution from higher margin service lines.

Other.  Other Adjusted EBITDA improved $0.5 million for the year ended December 31, 2024 to a loss of $21.7 million from a loss of $22.2 million. The balances included in Other reflect other general and administrative costs, which are not directly attributable to High Specification Rigs, Wireline Services or Processing Solutions and Ancillary Services. The year over year reduction is attributable to certain reduced personnel costs and professional fees.

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Liquidity and Capital Resources

Overview

We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet and equipment, organic growth initiatives, investments and acquisitions. Our primary sources of liquidity have historically been cash generated from operations and borrowings under our credit facilities. As of December 31, 2024, we had total liquidity of $112.1 million, consisting of $40.9 million of cash on hand and availability under our Wells Fargo Revolving Credit Facility of $71.2 million. Under the Wells Fargo Revolving Credit Facility, the total loan capacity was $75.0 million, net of no borrowings and $3.8 million in Letters of Credit open under the facility. This compares to the Company’s available borrowings under the Wells Fargo Revolving Credit Facility of $72.6 million as of December 31, 2023. We strive to maintain financial flexibility and proactively monitor potential capital sources to meet our investment and target liquidity requirements that permit us to manage the cyclicality associated with our business. We currently expect to have sufficient funds to meet the Company’s short and long-term liquidity requirements and comply with the covenants of our debt agreements. For further details, see “— Debt Agreements.”

Cash Flows

The following table presents our cash flows for the periods indicated:

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[[/GREPCENT_TABLE]]

Operating Activities

Net cash flows from operating activities decreased $6.3 million to $84.5 million for the year ended December 31, 2024 compared to $90.8 million for the year ended December 31, 2023. The change in cash flows from operating activities is primarily attributable to the change in working capital which decreased to $7.6 million for the year ended December 31, 2024 from $12.9 million for the year ended December 31, 2023 which was largely due to a decrease in contract assets and accounts payable balances, offset by collections of accounts receivable.

Investing Activities

Net cash flows used in investing activities increased $1.4 million to $31.1 million for the year ended December 31, 2024 compared to $29.7 million for the year ended December 31, 2023. The change in cash flows from investing activities is largely attributable to slight increases in fixed asset additions that took place during the year ended December 31, 2024 and less proceeds from asset disposals relative to those that occurred during the year ended December 31, 2023.

Financing Activities

Net cash flows used in financing activities decreased $20.9 million, or 43%, to cash used of $28.2 million for the year ended December 31, 2024 compared $49.1 million for the year ended December 31, 2023. For the year ended December 31, 2024, cash used in financing activities was primarily allocated to the repurchase of Class A Common Stock totaling $15.5 million, compared to $19.3 million in the prior year (see Part II, Item 8. Financial Statements and Supplementary Data — Note 10 — Equity). Additionally, the Company consolidated its debt and repaid the prior EBC Revolving Credit Facility, M&E Term Loan Facility, and the secured promissory note with borrowings from the new Wells Fargo Revolving Credit Facility (see —Debt Agreements, below, and Part II, Item 8. Financial Statements and Supplementary Data — Note 9 — Debt). These repayments, totaling $19.1 million, reflect the Company’s ability to pay down debt in 2023 with proceeds generated from operating activities.

Supplemental Cash Flow Disclosures

During the year ended December 31, 2024, the Company added fixed assets of $8.6 million and $4.6 million primarily related to finance leased assets and asset trades, respectively, across all operating segments. This compares to $10.0 million and $1.1 million primarily related to finance leased assets and asset trades, respectively, for the year ended December 31, 2023. Additionally, the Company paid approximately $2.0 million in interest related to debt and finance leased assets during 2024, compared to $1.4 million during 2023.

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Working Capital

Our working capital, which we define as total current assets less total current liabilities, was $78.7 million and $66.4 million as of December 31, 2024 and 2023, respectively. Increasing cash balances contributed most significantly to the working capital increase year over year.

Debt Agreements

Wells Fargo Bank, N.A. Credit Agreement

On May 31, 2023, the Company entered into a Credit Agreement with Wells Fargo Bank, N.A., providing the Company with the Wells Fargo Revolving Credit Facility in an aggregate principal amount of up to $75.0 million. Debt under the Credit Agreement is secured by a lien on substantially all of the Company’s assets. The Company was in compliance with the Credit Agreement covenant by maintaining a fixed charge coverage ratio (“FCCR”) of greater than 1.0 as of December 31, 2024, which is applicable only under certain borrowing levels.

The Company has up to $5.0 million available under the Wells Fargo Revolving Credit Facility for letters of credit, subject to assignment. At loan origination, the Company had a Letter of Credit in the amount of $1.6 million, to be utilized for working capital and general corporate purposes, as needed. On September 25, 2023, the Company entered into an agreement with Wells Fargo Bank, N.A. which designated an additional Letter of Credit in the amount of $1.6 million as part of incremental collateral requirements for the Company’s 2024 insurance renewal. The initial maturity date was September 25, 2024, with provisions for automatic annual renewal related to the same insurance policy. On September 25, 2024, the amount of the Letter of Credit was increased to $2.1 million as part of incremental collateral requirements for the Company’s 2025 insurance renewal, with a new maturity date of September 25, 2025. The interest rate for this Letter of Credit was approximately 1.8% for the month ended December 31, 2024.

The Wells Fargo Revolving Credit Facility was drawn in part on May 31, 2023, to repay the prior EBC Revolving Credit Facility, M&E Term Loan Facility, and the secured promissory note. The undrawn portion of the Wells Fargo Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other permitted uses, including the financing of permitted investments and restricted payments, such as dividends and share repurchases. The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable and unbilled revenue less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028. The Wells Fargo Revolving Credit Facility includes an acceleration clause and cash dominion provisions which under certain circumstances permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Wells Fargo Revolving Credit Facility. The borrowings of the Wells Fargo Revolving Credit Facility, therefore, are classified as Long-term debt, current portion on the Consolidated Balance Sheet.

Under the Wells Fargo Revolving Credit Facility, the total loan capacity is $75.0 million, which is based on a borrowing base certificate in effect as of December 31, 2024. On June 17, 2024, the Company entered into the First Amendment to the Wells Fargo Revolving Credit Facility, which allows for a percentage of unbilled revenue to be included in the calculation of the borrowing base. The Company did not have any borrowings under the Wells Fargo Revolving Credit Facility as of December 31, 2024. The Company does have $3.8 million in Letters of Credit open under the facility, leaving a residual $71.2 million available for borrowings as of December 31, 2024. Borrowings under the Wells Fargo Revolving Credit Facility bear interest at a rate per annum ranging from 1.75% to 2.25% in excess of SOFR and 0.75% to 1.25% in excess of the Base Rate, dependent on the average excess availability. The weighted average interest rate for the loan was approximately 7.2% for the year ended December 31, 2024.

Eclipse Loan and Security Agreement

On September 27, 2021, the Company entered into a loan and security agreement with Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC, as administrative agent providing the Company with a senior secured credit facility in an aggregate principal amount of $77.5 million, consisting of (i) a revolving credit facility in an aggregate principal amount of up to $50.0 million (the “EBC Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $15.0 million (the “Term Loan B Facility”). On August 16, 2022, the Company fully repaid the Term Loan B Facility and M&E Term Loan Facility, making principal payments totaling $12.4 million and $1.5 million, respectively. On May 31, 2023, the Company extinguished the Eclipse Revolving Credit Facility and Eclipse M&E Term Loan Facility, paying the remaining principal amount of $8.4 million to extinguish the debt, using

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funds from the Wells Fargo Revolving Credit Facility. The Company recognized a loss on the retirement of debt of $2.4 million in connection with the initiation of the Wells Fargo Revolving Credit Facility.

Secured Promissory Note

On July 8, 2021, the Company acquired the assets of PerfX Wireline Services (“PerfX”), a provider of wireline services that operated in Williston, North Dakota and Midland, Texas. In connection with the PerfX acquisition, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger, entered into a secured promissory note with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired. On May 31, 2023, the Company made principal payments totaling $5.4 million to extinguish the debt, using funds from the Wells Fargo Revolving Credit Facility.

Other Installment Purchases

During the year ended December 31, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral. During the years ended December 31, 2024 and 2023, the Company paid down the Installment Agreements by $0.1 million and $0.4 million, respectively. As of the year ended December 31, 2024, the Company had fully paid the Installment Agreements.

Capital Returns Program

On March 7, 2023, the Company announced a share repurchase program authorizing the Company to purchase up to $35 million of Class A Common Stock that could be utilized for up to 36 months. On March 4, 2024, the Company announced that its Board of Directors approved for additional share repurchases of $50.0 million, bringing the total share repurchase program authorization to $85.0 million in aggregate value.

In 2023, the Board of Directors approved the initiation a quarterly dividend of $0.05 per share. The Company believes that a share repurchase and dividend framework provides the best overall value creation potential for investors. The Company paid dividend distributions totaling $4.5 million and $2.4 million to stockholders for the year ended December 31, 2024 and 2023, respectively. The declaration of any future dividends is subject to the Board of Directors’ discretion and approval.

Critical Accounting Estimates and Policies

Our financial statements are prepared in accordance with U.S. GAAP. In connection with preparing our financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expense and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time we prepare our Consolidated Financial Statements. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our Consolidated Financial Statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates.

Our significant accounting policies are discussed in our audited Consolidated Financial Statements included elsewhere in this Annual Report. Management believes that the following accounting estimates are those most critical to fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.

Property and Equipment

Policy description

Property and equipment is stated at cost or estimated fair market value at the acquisition date less accumulated depreciation. Depreciation is charged to expense on the straight‑line basis over the estimated useful life of each asset, with estimated useful lives reviewed by management on an annual basis. Expenditures for major renewals and betterments are capitalized while expenditures for maintenance and repairs are charged to expenses as incurred. Assets under finance lease obligations and leasehold improvements are amortized over the shorter of the lease term or their respective estimated useful lives. Depreciation does not begin until property and equipment is placed in service. Once placed in service, depreciation on property and equipment continues while being repaired, refurbished or between periods of deployment.

Judgments and assumptions

Accounting for our property and equipment requires us to estimate the expected useful lives of our fleet and related equipment and any related salvage value. The range of estimated useful lives is based on overall size and specifications of the fleet, expected utilization along with continuous repairs and maintenance that may or may not extend the estimated useful

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lives. To the extent the expenditures extends the expected useful life, these expenditures are capitalized and depreciated over the extended useful life.

Assets Acquired and Liabilities Assumed in Business Combinations

Policy description

The Company accounts for its business combinations under the provisions of Accounting Standards Codification Topic 805-10, Business Combinations ("ASC 805-10"), which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed are recorded at the date of acquisition at their respective fair values. For transactions that are business combinations, the Company evaluates the existence of goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred.

Judgments and assumptions

The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed are based on various assumptions and valuation methodologies requiring considerable management judgment. The most significant variables in these valuations are discount rates and the number of years on which to base the cash flow projections, as well as other assumptions and estimates used to determine the cash inflows and outflows. Management determines discount rates based on the risk inherent in the acquired assets, specific risks, industry beta and capital structure of guideline companies. The valuation of an acquired business is based on available information at the acquisition date and assumptions that are believed to be reasonable. However, a change in facts and circumstances as of the acquisition date can result in subsequent adjustments during the measurement period, but no later than one year from the acquisition date.

Long‑lived Asset Impairment

Policy description

We evaluate the recoverability of the carrying value of long‑lived assets, including property and equipment and intangible assets, whenever events or circumstances indicate the carrying amount may not be recoverable. If a long‑lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long‑lived asset exceeds its fair value.

Judgments and assumptions

Our impairment analysis requires us to apply judgment in identifying impairment indicators and estimating future undiscounted cash flows of our fleets. If actual results are not consistent with our assumptions and estimates or our assumptions and estimates change due to new information, we may be exposed to an impairment charge. Key assumptions used to determine the undiscounted future cash flows include estimates of future fleet utilization and demands based on our assumptions around future commodity prices and capital expenditures of our customers.

Income Taxes

Policy description

The Company provides for income tax expense based on the liability method of accounting for income taxes. Deferred tax assets and liabilities are recorded based upon differences between the tax basis of assets and liabilities and their carrying values for financial reporting purposes and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. A release of a valuation allowance would result in the recognition of an increase in deferred tax assets and an income tax benefit in the period in which the release occurs, although the exact timing and amount of the release is subject to change based on numerous factors, including our projections of future taxable income, which we continue to assess based on available information each reporting period.

Judgments and assumptions

The establishment of a valuation allowance requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. Under U.S. GAAP, the valuation allowance is recorded to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized and is based

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upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes.

Equity‑Based Compensation

Policy description

We record equity‑based payments at fair value on the date of the grant, and expense the value of these awards in compensation expense over the applicable vesting periods.

Judgments and assumptions

We estimate the fair value of our performance stock units using an option pricing model that includes certain assumptions, such as volatility, dividend yield and the risk-free interest rate. Changes in these assumptions could change the fair value of our unit-based awards and associated compensation expense in our consolidated statements of operations.

Recent Accounting Pronouncements

For information regarding new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements, please refer to Recent Accounting Pronouncements included in “Part II, Item 8. Financial Statements and Supplementary Data—Note 2 — Summary of Significant Accounting Policies”

Smaller Reporting Company Status

The Company is a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act. Smaller reporting company means an issuer that is not an investment company, an asset-back issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that (i) has a market value of common stock held by non-affiliates of less than $250 million; or (i) has annual revenue of less than $100 million and either no common stock held by non-affiliates or a market value of common stock held by non-affiliates of less than $700 million. Smaller reporting company status is determined on an annual basis.